Greater good or greater profits? Patagonia proves you can achieve both

When news broke that Yvon Chouinard, the founder of Patagonia had given away his company to fight the climate crisis it raised a few eyebrows. Initially people were a bit sceptical – surely reports were wrong and he had sold Patagonia, not given it away? But no, in a radical business move the company has been transferred to an environmental trust and non-profit with plans to redistribute any profits that are not reinvested back into the company to environmental causes.

But this move shouldn’t really come as a surprise. Patagonia has long been a paragon of how to live your brand’s values every day, so announcing  “Earth is now our only shareholder” perfectly encapsulates what they are all about. And remarkably they aren’t just purpose-driven but also profitable, which prompts the question – how have they achieved this? We take a look. 

What is brand purpose?

Brand purpose is something that underpins what a brand is all about. It’s about defining the  long-term values that drive your brand and how you connect with your customers. Take Nike. Their corporate mission is to ‘Bring inspiration and innovation to every athlete’ and state ‘If you have a body, you are an athlete’. This is what drives everything they do and what also ultimately drives sales.

The mistake a lot of brands make is believing brand purpose is just about jumping on the latest social cause, such as Black Lives Matter or #MeToo in the mistaken belief this will make them more in tune with their target audiences. But too often this goes horribly wrong and ends up being branded as racewashing, greenwashing or pinkwashing. In fact, Persil has just been accused of greenwashing for their ‘kinder to our planet’ claim which has seen their TV ad banned by the Advertising Standards Authority (ASA).

And that’s what makes Patagonia so remarkable. Giving the company away isn’t a kneejerk reaction to growing concerns about climate change, but simply the next step in Patagonia’s long-term ambition to be more sustainable and ethical. From giving away 1% of sales each year to preserve and restore the natural environment, to announcing during COP26 that it no longer wanted to call itself a “sustainable brand” as it recognised it was still part of the problem, Patagonia has lived its environmental credentials consistently and constantly from day one. They aren’t paying lip service to their brand purpose but embodying it – and that’s how it should be done.   

Do brands need to have a purpose?

Anyone who’s been keeping up with our blogs will know we definitely think brands should have a purpose. After all, isn’t it important to know why a brand exists, what it hopes to achieve and how it’s going to get there? And who wouldn’t want to build more emotional relationships with their consumers as, ultimately, that will boost sales not to mention loyalty?

To put it another way: do you think Bodyform would have created so many memorable ads if it’s purpose wasn’t “Breaking taboos that hold women back”. Yes, we might have laughed at women roller skating, climbing mountains and  sky diving but you can’t deny those ads perfectly encapsulate their brand purpose.

And then there is Muji, whose brand purpose of delivering functional, simple and easy to use products is reflected in their store designs as well as all the products they sell.

Of course, not all brands get it right. When Chief Executive Alan Jope announced the brand purpose of Hellmann’s mayonnaise was “Fighting against food waste” he faced a sea of ridicule and was accused of being “obsessed with publicly displaying sustainability credentials”. On the face of it you can see why, but when you dig deeper into what the brand purpose actually means you can also see the rationale behind it. Simply put, if you use Hellmann’s mayonnaise you can turn leftover food into delicious meals, thereby cutting down on food waste.  It’s not necessarily a bad brand purpose but the fact it needs more context to actually understand and believe in it, is definitely not doing it any favours.

And then there was Verizon’s new brand purpose, which they launched a couple of years ago, “Humanability”. Focused on giving humans the ability to do more in this world, it can be summed up by the fact that when you click on a link on their website to learn ‘More about Humanability the page isn’t found!

The fact that big brands are still getting it wrong is one of the reasons why our workshops are so successful. As well as helping clients establish why a brand exists, we help define the ambition for the brand along with the steps and milestones needed to make it a reality.

Can you take brand purpose too far?

Now that’s the million dollar question, or in Patagonia’s case the billion dollar one!

Like anything in marketing, if it’s genuine, fits with your overarching vision and mission, then the argument is, no you can never go too far.

After all, look at Patagonia’s infamous Black Friday ad which told people “Don’t buy this Jacket”? and encouraged them to recycle, reuse and repair rather than buying new. Or the time it sued the Trump administration to block them from withdrawing the protected status of some 2 million acres of land belong to national monuments in Utah. While these moves might have seemed like madness, they perfectly epitomised Patagonia’s brand purpose, and somewhat ironically, the more Patagonia lives its brand purpose the more it sells, with annual sales now reaching an estimated $1 billion annually.

Of course, if other companies are planning to donate their companies to the common good, they would be well-advised to make sure their houses are in order first.

Starbucks’ brand purpose is “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time”, but over the last few years has faced a slew of criticism including tax avoidance, racism and what is seen as unnecessary price hikes. Living their brand purpose every day? Not so much.

And maybe that’s the real reason Patagonia is so successful compared to other brands. From the outset Yvon Chouinard didn’t want to be a businessman and when Forbes crowned him as a billionaire he felt it was a sign he had failed in his life’s mission to make the world a better and fairer place. But by placing brand purpose before profits he has helped go some way to fulfilling his mission while also making a lot of money at the same time.

Struggling with your brand’s purpose?

While defining your brand’s purpose can seem daunting, especially when so many companies get it wrong, if you put aside time, enthusiasm and commitment, you will get it right. And as our workshops and clients can testify, it’s definitely a process worth doing if you’re looking to get the edge on your competitors.

To find out more about how we can help you develop your brand’s purpose, take a look at our workshop brochure, website or get in touch. We would love nothing more than to help you find a brand purpose you can live every day.